F.C. Scores Bonanza: BJ’s Warehouse Locating Here

Retailer to Bring Up to $1 Million In Annual Taxes

This Monday, the Falls Church City Council is expected to approve a preliminary “memorandum of understanding” that will lead to the location of a new BJ’s Wholesale Club warehouse store in the City, construction of which could begin by next summer.

The project involves an innovative deal, including a tax revenue-sharing agreement with the new owners of the 8.4-acre site on Wilson Boulevard, until recently a Noland Oil property adjacent the small Wilson Shopping Center.

The prospective deal, tentatively struck last Friday, is being hailed as a bonanza that could add up to $1 million in annual tax revenue from an 87,800-square foot store, and is the result of a dogged effort by City of Falls Church officials to find a “highest and best use” for the light industrial-zoned location.

Led by Rick Goff in the City’s Economic Development Office, the City jumped when it learned the property, the largest remaining single non-residential lot in the City’s 2.2 square miles, had been acquired by the JBG Rosenfeld Retail Company last February.

City officials became particularly alarmed when they learned JBG intended to lease the property for 20 years to Car Max, a car dealership. The revenue yield from such retail uses is among the lowest per acre at $49,000 annually, compared to the $1 million that the new BJ’s could bring.

Goff and other City officials entered into intense discussions with JBG officials, who are represented by Falls Church City resident and former City Manager David Lasso. They urged JBG to pursue a “big box” retailer, and JBG did. BJ’s was responsive.

BJwharehouseMap.jpgBut the cost of considerable site preparation, including massive soil in-fill and leveling challenges, made the prospect cost prohibitive for JBG. That realization led to the crafting of a novel financial incentive offered by the City of Falls Church in the form of a tax revenue sharing plan that will boost revenues to JBG enabling it to afford the necessary infill, retaining wall, landscaping and traffic signalization upgrades needed to make it happen.

The tentative tax sharing deal provides the first $450,000 in annual tax revenues from the store will accrue to the City. For the next $500,000, half will go to the City and half to the developer. All revenues over $950,000 will come to the City. The deal is proposed to be in place for a 12 year maximum.

Terms of the deal were hammered out between the City’s Economic Development Council and JBG last Friday. It was presented to the City Council at its work session Monday night, and given the green light for a swift placement on this Monday’s business meeting agenda.

The potential tax yield from the developed site contrasts to the $250,000 per year currently coming from the location to the City, and is considered an extraordinary opportunity given the slumping economy. BJ’s was the only “big box” retailer who expressed an interest in locating there, among a large list of stores originally contacted.

BJ’s is a Natick, Massachusetts-based company listed on the New York Stock Exchange. It has 170 “membership clubs” in 16 states, including locations in Fairfax, Alexandria, Woodbridge and Fredericksburg, and 6,000 employees. It offers brand name groceries and merchandise, and some stores offer optical services, gas and heating oil, vacations and car rentals. The outlets accept all manufacturer coupons.

Falls Church City Manager Wyatt Shields, in comments to the News-Press Tuesday, praised Goff and the City staff for aggressively pursuing a “highest and best use” on the site, noting that it took from February until last week to nail down the deal.

A breath of fresh air in an otherwise stagnant economic environment, the deal could begin to deliver tax revenues to the City by the next fiscal year, he said, taking some considerable pressure off what was looming as the most difficult budget year in the City’s history.

With an overall budget of $76 million, Falls Church will receive a very significant boost from a project that could contribute up to $1 million a year, when completed and operational.

The City of Falls Church came close to landing a Price Club (now Costco) on the land now developed as the Pearson Square project on S. Maple St., in 1993, but lost it when one of 20 adjacent small property owners refused to sell. That Price Club wound up in Pentagon City. But the City has not had another offer for such a formidable “big box” retailer since, until now.